Its finally happened. Oil broke through the $100 a barrel barrier in New York today as a plunging dollar, unrest in Nigeria (see below) and Algeria and a cold snap in North America pushed futures prices up by $4 a barrel.
Today’s rapid rise in the cost of oil was prompted by a drop in the value of the dollar following grim news from the American manufacturing sector.
The weakest performance from industry in more than four years led to a sell-off in the US currency as dealers braced themselves for a cut in interest rates from the Federal Reserve later this month.
“$100 is just the beginning,” said Zachary Oxman, senior trader at Wisdom Financial in California. “This is kicking off what you are going to see this year. There will be huge moves up in gold and huge moves up in crude.”
Anyone want to bet what oil will be on December 31st?